Currency Exchange: What You Use Matters

currency exchange
craigfinlay/Flickr

To International travelers, the name Travelex should sound familiar. They are the largest airport currency exchange operator in the world. But a recent currency exchange study comparing the cost of using Travelex, some of the largest U.S. banks and credit cards revealed what experts already knew.

CardHub’s 2013 Currency Exchange Study compared the cost of the currency exchange services offered by 15 of the largest banks in the U.S. as well as Visa, MasterCard and Travelex. The study proved that using a no foreign fee credit card is the way to go on spending internationally. Banks charge an average of exchange rate of 7.1% and Travelex charges 15.5%.

Worried about using a credit card outside of the U.S.? Don’t be. Credit cards also provide fraud protection for just that reason.

“Even if a consumer uses a credit card with foreign fees – the average foreign transaction fee is 2.24%, according to CardHub’s latest Credit Card Landscape Report – he’ll still save 4.86% on currency conversion relative to the services offered by banks and 13.26% compared to airport currency exchange providers,” said CardHub CEO Odysseas Papadimitriou in a HeraldOnline report.

The best banks for currency conversion? The CardHub study indicates Northern Trust and Harris Bank lead the pack as they did in the 2012 and 2011 editions of the study while U.S. Bank and SunTrust hold the bottom two spots. On average though, banks are better than Travelex, saving an average 8.4%.Still, many travelers do not feel like they are fully packed for an international trip without some local currency from the country they are visiting. They want to arrive with local cash for a cab, food or supplies they may not have been able to bring on the plane.

“It’s just one of those things that have been traditionally recommended,” says Papadimitriou. “But with the banking system becoming increasingly digital, it makes sense that the easiest way to buy things in a foreign currency is with plastic.”

Credit cards are good. No foreign fee cards are better. Still, some cash will probably be necessary along the way tipping or making purchases in places that do not take cards. With that in mind, Papadimitriou recommends a debit card with low international ATM withdrawal fees but warns travelers to avoid dynamic currency conversion, when a merchant offers to convert your purchase total from the native currency to U.S. dollars.

It might seem as though that merchant in Venice is trying to be help make sense of how much a purchase really costs, in our own currency, but “they could be looking for an excuse to apply a high exchange rate and squeeze a bit more money out of you. It’s best not to find out, especially when you can use your phone or a small pocket calculator to make quick conversions and better understand how much things cost,” says Papadimitriou.

As long as we’re talking about financial security when traveling, what about pickpockets? Well, the days of those villains are ending. In this video we see that all it takes now is a smartphone to steal your credit card information.

Electronic Pickpocketers 'Steal' Credit Cards Using NFC

Fly or Drive? I can’t decide. Now I don’t have to

Fly or DriveSometimes it’s hard to decide whether to fly or drive to a destination within the continental United States. Cost comes into play either way and sometimes its the price of gas to be concerned about. Other times, flights are expensive so there’s that too. A new online tool takes some of the guesswork out of it and can steer us in the right direction.

The new Fly or Drive Calculator from BeFrugal.com might be just what the doctor ordered for your ailing travel budget and its easy to use. I entered information on a trip from Orlando to Chicago with just a few keystrokes, added my vehicle information, how many hours a day I might drive and what a hotel might cost along the way. Easy-to-navigate screens then asked for my home airport and the airport at my destination along with how much time I thought I needed for check-in at home and at the destination airport after landing. Finally, I could add in transfer cost to and from the airports, baggage fees and either accept the tool’s estimated flight cost or plug in one of my own. The results looked quite realistic.

So much for saving money by driving huh?

The Fly or Drive calculator also gives me turn-by-turn directions on how to get where I am going should I choose to drive and links to air tickets via Priceline or Travelocity should I choose to fly.

I had fun replacing my 2008 Honda Fit with a 1989 Ford Thunderbird V-8 which ran up the price about $300. That might have been worth it though. The T-bird would probably make for a much more enjoyable road trip.

The Fly or Drive calculator is just one tool at BeFrugal.com. They also have tools to help find out how much to spend on a car or another one that tells if its worth buying an Electric Car instead of Hybrid or Gas. The site has online and printable coupons, discounts and special offers from a variety of sources and a round-up section that has the latest ads on stores from fast food to hardware.

This one is a winner and a great example of social media coming home with something we can use. Gadling got this tip from Chris McGinnis, @cjmcginnis on Twitter. That’s sure a good one to follow, all the way to the bank.

Flickr photo by MSVG

Dollar Hits All-time Low against Euro – Again!

Crap!

The US dollar has once again hit an all-time low against the Euro.

While this is hardly news these days, it makes me cringe every time I see this headline. And let me tell you, we’ve seen a lot of it in the last couple of years.

Things have dropped a long way since the glory days for American tourists visiting Europe when the euro was worth only 83 cents to the dollar. Since that point, the dollar has plummeted to the point where a euro is now worth $1.3927–a record established on September 13 for the European currency. As if this wasn’t bad enough, the dollar also hit an all-time low against the Canadian dollar on the same day.

It’s gotten so bad that LA Times journalist Tom Petruno jokingly refers to the currency as the “American peso.”

While this is great news for American exporters whose products are now considered deals in Europe, it remains horrible news for us travelers in search of adventure abroad. It also means that my next holiday is going to be domestic. Kansas here I come!